Thursday, February 24, 2011

Earlier today, Attorney General Eric Holder announced that the Obama Administration will no longer defend Section 3 of the Defense of Marriage Act. Here is a portion of his statement.

"After careful consideration, including a review of my recommendation, the President has concluded that given a number of factors, including a documented history of discrimination, classifications based on sexual orientation should be subject to a more heightened standard of scrutiny. The President has also concluded that Section 3 of DOMA, applied to legally married same-sex couples, fails to meet that standard and is therefore unconstitutional. Given that conclusion, the President has instructed the Department not to defend the statute in such cases. I fully concur in the President's determination."

In other words, both President Obama and Attorney General Holder In other words, both President Obama and Attorney General Holder believe that DOMA's discrimination against gays and lesbians is more analogous to discrimination based on race or religion and thus subject to heightened constitutional scrutiny than, say, discrimination based on age, which is subject only to minimal scrutiny. Because the President and Attorney General cannot imagine a strong government interest justifying such discrimination, they will refuse to defend the law they have enforced and then defended for the past two years.

At the same time, Attorney General Holder's memo states that the Executive Branch will continue to enforce DOMA, that is, will continue to enage in the very discrimination that the President says violates the Constitution. As Holder put it: "Section 3 of DOMA will continue to remain in effect unless Congress repeals it or there is a final judicial finding that strikes it down, and the President informs me that the Executive Branch will continue to enforce the law."

While some are praising his decision, others are criticizing the President for declining to defend a statute passed by Congress, particularly a statute that the President has enforced and defended for the first half of his Administration. For instance, Orin Kerr at the Volokh Conspiracy has suggested that the failure to enforce the statute is an "Executive Power Grab." He also also noted that, if the current President can refuse to defend DOMA, then a future President, perhaps a Republican, could decline to defend the coercive individual mandate contained in the recent health reform legislation, if that President believes there are no reasonable constitutional arguments in defense of that mandate. (See Kerr's post making this point here.)

My own take is a little different from that of Professor Kerr and other critics of President Obama's action. That is, unlike Professor Kerr, who believes the President has gone too far in using his office to further his constitutional vision, my own view is that he has not gone far enough.

As previously explained on this Blog, Presidents may decline to enforce statutes they believe to be unconstitutional, without waiting for a court to pass on the enactment. Indeed, at the Pennsylvania Ratifying Convention, James Wilson, a prominent founder, justified judicial review by arguing that the President could decline to enforce an unconstitutional statute and that, by analogy, judges could also review statutes to determine their constitutionality. James Madison explained that each Department or Branch of government had to interpret the Constitution for itself when carrying out the duties that the Constitution assigns to them, including, for instance, the execution of statutes. Moreover, students of Constitutional Law will remember Myers v. United States, which arose because President Woodrow Wilson fired and stopped paying a postmaster, contrary to a statute that required Advice and Consent of the Senate, which Wilson did not even attempt to obtain. (The Supreme Court upheld Wilson's view that the requirement of Senatorial consent was unconstitutional, without questioning his decision to fire the postmaster.) And, of course, in his first innaugural address, President Lincoln, pictured above, famously announced, as he had argued in the Lincoln-Douglas debates, that he did not consider himself bound by the Supreme Court's decision in Dred Scott v. Sanford, except with respect to the actual parties in the case. Thus, Lincoln ordered the Executive Branch to grant patents and passports to qualified African-Americans, even though Dred Scott had held that African-Americans were not citizens and thus, by implication, not entitled to such statutory benefits, because he (Lincoln) believed that Dred Scott was simply wrong.

Thus, President Obama's approach seems internally incoherent. On the one hand, he claims that he will not defend DOMA because it is unconstitutional, indeed, so unconstitutional that there are no reasonable arguments in support of the statute. At the same time, the President and his Attorney General both assert that they will continue to enforce what they believe to be a blatantly unconstitutional law. Huh? If DOMA really is so blatantly unconstitutional, because it works unconstitutional discrimination, analogous to discrimination based on race or religion, should not the President simply refuse to enforce DOMA altogether? Imagine if, instead of classifying individuals based upon their sexual orientation, DOMA classified individuals based on race or religion and, for instance, denied federal benefits to Catholics or Asian-Americans lawfully married in their state of residence. Would President Obama and Attorney General Holder enforce such a statute, forcing affected indiviuals to challenge it in court? Certainly President Lincoln would not have enforced an enactment he believed to be unconstitutional, and I hope President Obama and Attorney General Holder would follow Lincoln's lead in such a situation. Why President Obama nonetheless continues to enforce DOMA, given his purported belief that the statute is plainly unconstitutional, is perplexing and causes this blogger to wonder whether President Obama is as certain about his constitutional views on the subject as Attorney General Holder's statement suggests.

Wednesday, February 23, 2011

The Institute of Bill of Rights Law here at the William and Mary School of Law has posted the video of a debate between your humble blogger (pictured above on the right) and Michael Klarman (pictured above on the left), the Kirkland and Ellis Professor of Law at Harvard Law School. Here is a link to the video, which is in several parts. (The photo of Professor Klarman and myself, taken in the Institute, served as promotional material for a prior debate. Note the painting of the Constitutional Convention in the background.) Not surprisingly, I took the position that, when interpreting the Constitution, courts should adhere to the original public meaning of the document, endorsing the argument for Constitutionalism and judicial review articulated by John Marshall (pictured above) in Marbury v. Madison and Alexander Hamilton in Federalist 78.

As John Marshall put it in Marbury:

"That the people have an original right to establish for their future government such principles as, in their opinion, shall most conduce to their own happiness is the basis on which the whole American fabric has been erected. The exercise of this original right is a very great exertion; nor can it nor ought it to be frequently repeated. The principles, therefore, so established are deemed fundamental. And as the authority from which they proceed, is supreme, and can seldom act, they are designed to be permanent." (emphases added).

According to Marshall, then, the Constitution is binding because the People --- the ultimate repository of sovereignty --- are empowered to exercise that sovereignty in a manner that establishes the authority and limits of their government. The principles thereby established, Marshall says, are "fundamental" and "designed to be permanent." That is, such principles bind future generations, the government officials they elect, and the judges that such officials appoint and confirm.

This rationale for why the Constitution is binding, I (and others before me) argue, has certain implications for how courts (and other governmental actors) should go about interpreting the Constitution when called upon to do so. Thus Judges, for instance, should not treat the Constitution and judicial review as a license to choose whichever interpretive theory they please. Instead, the embrace of judicial review implies certain limits on the manner in which such authority is exercised. That is, the Constitution, from which judges derive their entire authority, imposes upon judges (and other officials) a duty to enforce the document's original meaning; nothing more and nothing else. Failure to execute this duty by, for instance, sustaining a statute contrary to the document's original meaning contravenes Marbury's rationale for a written, binding constitution as well as the rationale for empowering judges (and other officials) to enforce that document. In my view, then, a judge who purports to exercise judicial review while intentionally ignoring the original meaning of the constitution is not exercising "judicial power" in the first place, but is instead purporting to exercise an extra-constitutional authority not contemplated by the document or its ratifiers. (I have articulated this account of Marbury, along with some other implications of the decision, in a lengthy, previous post here.)

Watch the video to see Professor Klarman's response!

One final note.

I've had the pleasure of debating Professor Klarman four times --- three times here at William and Mary on Originalism and once at the University of Virginia on the soundness (or not) of the Supreme Court's decision in Bush v. Gore. He is an extraordinary scholar and person, and he has been a great friend to me over the years. I look forward to future debates!

In this video, Allison Orr Larsen, Assistant Professor of Law at William and Mary, provides an excellent precis of the arguments, both pro and con, regarding the constitutionality (or not) of a mandatory requirement that all citizens who can afford to do so purchase a health insurance policy defined by the national government.

In a superb Op-Ed, Patrick McIlhern of the Milwaukee Journal Sentinel offers some historical perspective on the dispute between Wisconsin's public employee unions and the Governor elected by those who pay their salaries. In particular, McIlhern shows that opposition to collective bargaining by government employees has a venerable source -- President Franklin Delano Roosevelt, pictured above. According to McIlhern, FDR expressed his opposition to such collective bargaining by state employees in a letter to the National Federation of Federal Employees. To quote McIlhern, quoting FDR:

“The process of collective bargaining, as usually understood, cannot be transplanted into public service,” Roosevelt wrote in 1937 to the National Federation of Federal Employees. Yes, public workers may demand fair treatment, wrote Roosevelt. But he wrote, “I want to emphasize my conviction that militant tactics have no place” in the public sector. “A strike of public employees manifests nothing less than an intent to prevent or obstruct the operations of Government.”

It's ironic that, unlike FDR, who opposed such collective bargaining altogether, Governor Walker of Wisconsin (picture between FDR and President Obama, above) supports such bargaining over wages and salaries, but merely opposes it for benefits and working conditions. Thus, under Walker's proposal, public employees would have GREATER bargaining rights than the 90 percent of America's private sector workers who are not members of unions and thus cannot bargain collectively over ANY terms of their employment.

Meanwhile, President Obama has staked out a position far to the left of FDR......

Tuesday, February 15, 2011

In an Op-Ed last week in the New York Times, Laurence Tribe joins the effort to demonize individuals who decline to purchase health insurance, claiming that such individuals "choose to take a free ride on the health care system."

According to Tribe:

"Individuals who don’t purchase insurance they can afford have made a choice to take a free ride on the health care system. They know that if they need emergency-room care that they can’t pay for, the public will pick up the tab. This conscious choice carries serious economic consequences for the national health care market, which makes it a proper subject for federal regulation."

As Tribe sees it, such a "choice" to free ride by declining to purchase insurance impacts interstate commerce, with the result that Congress can ban that choice, by requiring individuals to purchase a health insurance policy whose terms are set by the national government.

Tribe's broad-brush characterization of those who decline to purchase health insurance fails to consider a more obvious explanation for why many individuals choose not to purchase health insurance and is thus off the mark, to say the least. Moreover, even if some such individuals ARE properly characterized as free riders, such a "choice" to free ride does not justify requiring such individuals to purchase the sort of health insurance mandated by the recent health care reform legislation. Finally, Tribe's argument proves too much, as it would justify all sorts of regulation of personal choices plainly beyond the reach of the National Government on the flimsy ground that unregulated individuals are "free riding."

Consider the following:

First, Tribe fails to note that the health care reform legislation he supports itself deters many individuals from purchasing health insurance and thereby would, without the coercive individual mandate, increase the number of individuals who are uninsured. Why? Because the law raises the price of health insurance for relatively young and healthy individuals by mandating a form of community rating whereby perfectly healthy individuals must pay significantly more each year for health insurance than the expected annual cost of their care. It should be no surprise, then, that some such individuals will, because of the new "reform," choose not to purchase insurance in the marketplace, opting instead to pay for their own medical expenses "out of pocket." Such individuals would not be "free riding" at all, but instead avoiding a federal requirement that they pay unreasonable prices for their health insurance. (In the same way, good drivers might decline to purchase automobile insurance if the State required insurance companies to charge reckless drivers and perfect drivers the very same premium, a premium that would have to reflect the average expected losses from accidents caused by both drivers during any given year.) While subsidizing the health care expenses of less healthy individuals may be good public policy, the body politic could instead choose to do so in an honest and transparent fashion, instead of diverting attention from the true impact of the law by falsely characterizing all who fail to purchase health insurance as "free riders."

Second, individuals who self-insure, that is, pay for their health care expenses "out of pocket," often subsidize individuals who receive their health care under the auspices of insurance plans. While insurance plans can obtain discounts from health care providers because they bargain on behalf of numerous individuals, individuals bargain on behalf of themselves, only. Paying full price for health care is hardly "free riding."

Third, while Tribe decries the possibility of free riding, he ignores the fact that the individual mandate does not apply to those individuals most likely to end up incurring medical bills they cannot afford. For, as Tribe notes, the law only requires individuals to purchase insurance if they are financially able to do so. However, individuals with the financial wherewithal to purchase the sort of over-priced insurance mandated by the new law will often have the financial means necessary to pay for their own medical care, including emergency room visits. (While federal law requires hospitals that receive federal funds to provide emergency care regardless of willingness or ability to pay, it does not prevent hospitals from billing individuals for such care after the fact.) By contrast, individuals who, often through no fault of their own, cannot afford such overpriced plans will more often not be able to pay their own health expenses and thus are more likely to free ride on the overall health care system. But, again, the individual mandate does not apply to such individuals.

Fourth, let's assume for the sake of argument that some who decline to purchase over-priced health insurance are properly characterized as free riders because they ultimately end up using emergency room care. (I should note, however, that Tribe offers no data hinting at what proportion of self-insuring individuals in fact fall into this category.) Even so, such free riding does not, as a matter of policy, justify mandating the purchase of basic health insurance that covers run-of-the-mill health care expenditures. Instead, at most, the prospect of such free riding would, as a matter of policy, merely justify a requirement that such individuals purchase a policy to cover catastrophic health care expenditures associated with, say, a very expensive visit to the emergency room.

Fifth, it should be clear that the sort of mandate that Tribe favors is vastly over-inclusive and also under-inclusive. That is, it applies to all sorts of individuals who are NOT free riders and who instead choose to self-insure to avoid paying unreasonably high premiums. Moreover, the law does NOT apply to those individuals who, because they are of modest means, cannot afford such insurance.

Sixth, even if Tribe's argument somehow made sense as a matter of policy, it falls flat as a matter of Constitutional Law because it "proves too much," that is, it justifies national regulation that plainly exceeds the power of Congress under any conceivable account of the scope of the Commerce Clause. All sorts of human inactivity impacts the health care system in one sense or another. For instance, each day millions of Americans who do have health insurance or are eligible for Medicare or Medicaid choose not to exercise, to eat too much and/or eat the wrong things, to sleep too little (or too much), etc. Each such choice can increase the risk that an individual who has insurance will have to incur health care expenses reimbursed by his or her health plan or, for that matter, Medicare or Medicaid. Thus, in failing to exercise regularly, for instance, individuals "free ride" on taxes or premiums paid by those who DO exercise regularly and thus minimize their own health care expenses. No where does Tribe articulate an account of the Commerce Clause that would, for instance, empower Congress to jail or otherwise penalize those Americans who fail to do 50 jumping jacks each morning.

Last week William and Mary released the schedule for the 2011 football season. Here it is. Note that, while the schedule includes dates, all times are "to be announced." All games will take place on Saturday; games in bold will take place at Zable Stadium in Williamsburg. Games marked with an asterisk are CAA conference games. (Note that Old Dominion joins the CAA in football in 2011.) The Tribe also recently announced its 2011 incoming recruiting class, including a tailback transferring from the Naval Academy. Go here for the story, which includes video highlights of each new recruit.

* * * * *

The Tribe will open at the University of Virginia on Saturday, September 3. Let's hope for a repeat of the Tribe's 2009 26-14 upset of the Cavaliers, previously reported on this blog here and here and memorialized in the photo posted above and taken by your humble blogger, who attended the game. (For a superb highlight video, apparently put together by someone affiliated with the University of Virginia, go here. Early portions of the video focus on early successes by Virginia, but the tide turns as the video unfolds. Go here for a shorter video put together by William and Mary.)

"Members of the Cabinet will travel throughout the country to highlight the pillars of the president's remarks, visiting companies and schools that are already engaged in cutting-edge ways to innovate and accelerate economic growth[.]"

Let's hope that the particular project Biden is touting is not indicative of the Obama Administration's Economic Policy. Biden is visiting ENER 1 because it received a $ 118 million grant under the "Stimulus Package." According to a local news source, ENER 1 employs a grand total of 350 people. Hence, even if one assumes that the grant is responsible for each and every job at the company in the year the grant was received, the jobs in question cost $337,000 each that year. Such a method of "job creation," if applied across the board, would rapidly bankrupt the country.

Moreover, even if the price tag of such jobs was lower, there is a more fundamental policy question to be engaged here. That is, should the National Government be choosing economic winners and losers, taxing some individuals and firms (or incurring debt to be paid back later) so as to subsidize those the government chooses to favor. Generally Free Societies rely upon decentralized market-based decision making to allocate scare factors of production, such as labor, capital and technology. If, as the Obama administration apparently believes, the production of particular batteries by a particular company is cost-justified, then presumably private investors will put their money at risk to support that production, having chosen such an investment over other opportunities, hoping to reap economic rewards in the process. And, in fact, ENER 1 has, according to CNBC, raised millions in private capital markets to support its enterprise, presumable because investors are optimistic about the company's success. There is no reason to believe that the National Government, which also has alternative uses for the capital it raises via taxation or borrowing, will do a better job choosing between competing uses (and there are ALWAYS competing uses) for that capital than private markets. Indeed, one suspects --- and Free Societies generally assume --- that private markets will do a better job deciding between different possible uses of scarce capital, thereby maximizing society's economic welfare for any given endowment of resources. If, say, the National Government wishes to encourage the production of alternatives to cars powered by fossil fuels, because such cars impose external harms in the form of pollution, it should, for instance, increase the tax on gasoline, or subsidize the purchase of automobiles --- and not just automobiles manufactured by a particular company. These steps would encourage consumers to demand automobiles that attain higher gas mileage, thereby encouraging private market actors to meet that demand in various ways, including more fuel-efficient gasoline-powered automobiles. The decentralized process of meeting this demand would presumably produce a more efficient allocation of labor and capital than a system under which the national government selects picks particular industries or even single companies to be the recipients of government largesse.

Finally, it should be noted that the sort of planning the Administration contemplates will do more than misallocate capital between various industries; the existence of such planning will also cause private firms to invest scarce resources in lobbying members of Congress and the Administration itself in an effort to obtain such subsidies. Unlike, say, an investment in plant and equipment, or research and development, such investments will produce no wealth. (By contrast, even a losing investment usually produces some output, even if that output is less than the magnitude of the investment.) Thus, the existence or possible existence of such programs will result in the diversion of scarce resources from productive to non-productive uses.

Tuesday, February 1, 2011

Earlier this week Judge Vinson, of the Northern District of Florida, struck down the health insurance reform legislation that Congress passed in 2009. In particular, Judge Vinson held that the so-called “individual mandate,” which coercively requires all Americans to purchase health insurance, exceeds the power of Congress under Article I, Section 8 of the Constitution. In particular, he held that the mandate exceeds the authority of Congress to regulate commerce "among the several states" and that the law is not “necessary and proper” to carrying into execution the health reform law. As Judge Vinson recognized (and as this blog has previously pointed out) the government's rationale for treating the coercive individual mandate as constitutional would eliminate any meaningful limits on federal power, contrary to the plain language of the Constitution and even the Supreme Court's own decisions, which have repeatedly emphasized that the national government is one of enumerated powers, thereby leaving certain powers exclusively to the states. Thus, as Chief Justice John Marshall, pictured above, put it in Gibbons v. Ogden, 22 U.S. 1 (1824) "[t]he genius and character of the whole government" rested upon a limitation in the powers of Congress and resulting allocation to states of the remaining powers. More recently, in United States v. Morrison, 529 U.S. 598 (2000) the Supreme Court reiterated, quite properly, that:

"The Constitution requires a distinction between what is truly national and what is truly local. In recognizing this fact we preserve one of the few principles that has been consistent since the [Commerce] Clause was adopted."

As Judge Vinson put it:

"[Under the Obama Administration's argument] Congress could require that everyone above a certain income threshold buy a General Motors automobile—now partially government-owned—because those who do not buy GM cars (or those who buy foreign cars) are adversely impacting commerce and a taxpayer-subsidized business."

Of course, Judge Vinson is not the first judge to find that the coercive individual mandate exceeds the authority of Congress. This blog has previously praised Judge Henry Hudson’s similar ruling that the individual mandate exceeds the authority of Congress under the Commerce and Necessary and Proper Clauses. However, Judge Vinson went one considerable step further than Judge Hudson. Judge Hudson merely voided the individual mandate itself, holding that the rest of the law could still stand. That is, Judge Hudson held that the rest of the law was "severable" from the unconstitutional individual mandate. By contrast, Judge Vinson found that the unconstitutional provision was not severable and thereby voided the entire law.

While some have found Judge Vinson's decision to void more than the mandate itself surprising, this blogger was not surprised, for two reasons.

First, federal statutes routinely contain so-called severability clause, declaring that, if a portion of the law is deemed unconstitutional by the courts, Congress intends that the rest of the law should nonetheless remain in effect. While the presence of such a clause does not absolutely settle the question of severability, such a clause does militate against voiding an entire law simply because a portion is unconstitutional. However, the health care reform legislation contains no such clause, thereby giving rise to a possible inference that Congress meant the law to stand or fall in its entirety, i.e., for the entire law to become void if any portion of it is unconstitutional.

Second, the Obama Administration has repeatedly argued that the individual mandate is a critical portion of the overall scheme created by the statute. Indeed, in a recent Op-Ed, Attorney General Holder and Secretary of Health and Human Services Sebelius argued that, if the coercive individual mandate is struck down, there would be "devastating consequences for everyone with health insurance." Why? As Richard Epstein explains in this Op-Ed, the individual mandate is simply a covert tax on individuals who otherwise would not choose to purchase health insurance. That is to say, and as previously discussed on this blog, the law --- like previous "reform" in Massachusetts --- prevents insurance companies from denying coverage to individuals because of "pre-existing conditions." Under this "community rating" approach, insurance companies must generally provide such insurance on equal terms, including price, to all customers. As a result, individuals who are healthy, because of youth, good fortune, good habits or a combination of all three will pay more for such "insurance" than the expected cost of their care, while other individuals will pay less. (By analogy, imagine a law that required life insurance companies to charge the same premimums for term insurance without regard to the age or health of the insured.) Not surprisingly, many individuals with lower than average expected medical expenses would respond to such community rating by choosing to self-insure, that is, declining to purchase "community rated" insurance and paying whatever health care expenses they might incur "out of pocket." The individual mandate targets these individuals --- forcing them to purchase such insurance, at inflated premia, thereby subsidizing the purchase of insurance by others. Without this coercive requirement and the revenue that it generates, less healthy individuals who do choose to purchase insurance will pay higher prices than they would otherwise pay, though of course these premia that more closely approximate the actual cost of health care they will incur over the life of the policy.

Of course, there are provisions of the law that can function perfectly even without the individual mandate, e.g., provisions encouraging the study of best health care practices. However, the mere fact that part of a law can continue to function despite the invalidation of a different part cannot by itself require a court to sever the offending portion. If it did, then Congress could ensure severability simply by inserting a minor and unproblematic provision in each bill, perhaps even a provision identical to similar provisions in prior bills.

These considerations highlight a dilemma for the current Administration as it seeks to defend the law, with its unprecedented requirement that Americans who do not wish to engage in commerce must do so anyway, by purchasing health insurance they do not want or need. On the one hand, the Administration attempts to convince courts (and the public) that this unprecedented mandate plays a critical role in the health reform legislation it supported, sometimes even seeming to imply that, without the mandate, Congress would have to go back to "square one" and design a diferent system of reform. (Though, it should be noted that "absolute necessity" is not required for the mandate to be sustained under the Necessary and Proper Clause, as John Marshall explained in McCulloch v. Maryland, 17 U.S. 316 (1819).) On the other hand, to argue that the provision is severable, the Administration must contend that the law can continue to function despite the absence of the individual mandate. There is, to say the least, a tension between these two claims.

Note, however, that there may have been a "third way." Professor Michael Dorf, at Cornell Law School, has suggested in this post that Judge Vinson could have struck down the mandate and other provisions of the law intertwined with it, e.g., the insurance exchanges the law creates, without also invalidating those provisions that are wholly unrelated to the mandate, e.g., a provision that prevents discrimination against health care providers that decline to provide assisted suicide services.

Some of Your Blogger's Papers Are Posted Here:

Bishop James Madison

Portrait of Bishop James Madison

Who Was Bishop Madison ?

Bishop James Madison, the cousin of our nation's fourth President, was the President of the College of William and Mary from 1777 until his death in 1812. Prior to appointment as President, Madison served as a professor of natural philosophy and mathematics. During the Revolutionary War, Madison organized a militia company of students. William and Mary claims that Madison was the first professor of Political Economy in the United States. His lectures on the subject relied upon Adam Smith's Wealth of Nations, published in 1776. Along with Thomas Jefferson, Madison was instrumental in founding the School of Law at William and Mary, appointing George Wythe as William and Mary's first Professor of Law and Police.